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DOCUMENT RESUBE
04552 - (B0104991]
Emergency Natural Gas Purchases: Actions Needed to Correct
Program ibuses and Consumer Inequities. EZD-78-10; B-178205.
January 6. 1978. 32 pp. + 4 appindices (5 pp.).
Report to the Congress; by Elmer B. Staats, Comptroller General.
Issue Area: Energy: Effect of Federal Efforts on Energy
Conservation (1607); Energy: Role of Fossil Fuels in Meeting
Future Needs (1609)fSaterials: Availability of Nonrenewable
Resources (1811).
Contact: Energy and uinerals Div.
Budget Puaction: Natural lesources, Environment, and Energy:
Other Natural Resources (306); Natural Resources,
Environment, and Energy: Energy (305).
organizaticn Concerned: Federal Power Commission; Federal Energy
Regulatory Commission.
Congressional Relevance: House Committee on Interstate and
Foreign Ccmmerce; Senzte Committee on Energy and Natural
Resources; Congress.
Authority: Natuzal Gas Act of 1938, as amended (15 U.S.C. 717 et
seq.). Esergency Natural Gas Act of 1977 (P.L. 95-2). Energy
Supply 4nd Environmental Coordination Act of 1974 (P.L.
93-319). FPC Order 467-8. PPC Orinion 699-2.
Under the Ntural Gas Act of 1938, e3 amenrded, the
Federal Power Commission (YPC) is responsibl% fo. regulating the
interstate commc-ce of natural gas, including the price
producers r aceive for natural gas and ttn price that pipeline
companies can charge fcr transporting it. &PC issued regulations
for emergency natural gas purchases to kelp alleviate tesporary
shortages in the interstate sarket, Lad the Congress provided
the President with spcial powers to assure adequate suprlies
for high-priority uses during the adverse 1976-77 winter season.
Findings/Conclusions: The manner in which FPC regulated
emergency purchase , rovisions resulted in ixtrastate pipeline
cospanies avoiding regvlations while dealing in the interstate
market. Consequently, many interstate pipeline ccapanies were
allowed to lise emergency purchases for sales to low-priority
customers that had alteruate fuel capabilities. This was
contrary to national policy of attempting to shift high-voluse
industrial and utility gas users to coal and other energy
sources. These actions here also inequitable because
high-priority customers not affected by curtailment were forced
to bear part of the higher cost of emergency purchases, thereby
subsidizing low-priority users. Problems eAcountered emphasize
the need for taking strong measures to curb low-priority uses of
emergency natural gas and improving the administration of
emergency natutal gas purchase programs. Becommeneations: The
Federal Energy Regulatory Conmission should amend requlations
for emergency purchases of natural gas to: define an emergency
as a situation in which a gas company's supply for high-priority](ViewImageLocal?handle=hein.gao/gaobaawkg0001&div=1&collection=&method=preview&ext=.png&size=3)